Monday 11th March 2013
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Wellington Drive Technologies, the unprofitable manufacturer of energy efficient motors, raised $4 million in a placement to institutions, managers and existing investors such as SuperLife Investments. The stock jumped when it came off trading halt following the statement.
The Auckland-based company said it is making the placement in two tranches - 16 million shares in a private placement to institutions and professional investors including SuperLife at 13 cents a share, raising $2.08 million and amounting to 19.8 percent of shares on issue.
It will also sell 14.769 million shares at that price to institutions, professional investors, directors and management to raise $1.92 million, or 15.3 percent of shares on issue. The second tranche requires shareholder approval for SuperLife's participation, necessitating an independent appraisal. Shareholders will vote at the company's annual meeting.
SuperLife, a KiwiSaver and insurance provider owned by closely held Aventine Group, already owns 16.6 percent of the company, after a $2.1 million placement last year.
Wellington Drive said it plans to raise a further $1 million via a share purchase plan.
The shares rose 14 percent to 16 cents on the NZX today, having traded at 14 cents before the trading halt for the capital raising.
Chairman Tony Nowell said the funds raised will be put toward the company's growth strategy, which aims to achieve positive earnings before interest, tax, depreciation and amortisation in 2014.
The manufacturer has embarked on a turnaround plan which has seen it exit ventilation production in Singapore, now outsourced to Ziehl-Abegg, and cut its inventory, supply chain and operating costs. The company shrank its net loss to $6.3 million in calendar 2012 from $14.5 million a year earlier.
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